I Don’t Want My Checking Account Balance to Get Bigger in 2024. Here’s Why

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I don’t keep any more money than I need in checking accounts. Find out what I do with the rest of my money instead. 

Growing your wealth over time is always a smart goal. But, despite my interest in improving my personal finances, I’m not interested in having a bigger checking account balance in 2024. There’s a very simple reason for that.

Why I don’t want a bigger checking account balance in 2024

I have no interest in keeping extra money in my checking account because this account just serves as a holding station for my money before it goes elsewhere. Checking accounts don’t usually pay any interest, or if they do, they pay a tiny amount. And if you spend money from your checking account by writing checks or using a debit card, you typically don’t earn any rewards.

As a result, there’s no real benefit of putting any more money than is necessary into them. I have my paychecks deposited into my checking account, but then most of the money is moved into other places where it can benefit me more. My checking account balance shouldn’t grow because I only keep the money in there that I need to pay my bills. It’s only in there temporarily.

I keep a little cushion of about $1,000 in my checking account to make sure I don’t overdraft if I forget about a payment. But that amount doesn’t need to grow either, as it’s unlikely that I’d forget about more than $1,000 worth of transactions.

Here’s where my money will go instead

Rather than letting my checking account balance grow bigger, I arrange to have my money moved into better places where it can do more for me — and where I’m not going to be as tempted to spend the cash on other things.

As soon as my paychecks hit my checking account, I move a good amount of the money out of it and into my brokerage account, where I can invest it and hopefully earn a generous return that helps my wealth grow. I also move some money into savings to accomplish short-term goals. If I end up making more money this year, which I hope to do, I’ll increase the amount I move into my savings and brokerage accounts. So, while those account balances will grow, my checking account balance won’t.

I also set up automatic bill payments to come out of my checking account, including for the credit cards I use to make just about all of my purchases. If I decide I want to increase my spending this year because I’m making more money, the extra cash for that will also disappear from my checking account as soon as the credit card balance is due.

The bottom line: There’s no reason to keep more money in checking than you need to pay for upcoming bills. Like me, you may want to keep a cushion in this account to avoid overdrafts, and then set it up so your payments and investments come directly out of checking. Don’t keep extra cash there or try to grow your checking account balance since your money can be better used elsewhere.

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